Halifax has announced mortgage rate reductions of up to 0.25% for customers and potential customers, but experts caution that the good news may be temporary. The lender revealed cuts on Tuesday afternoon for two, three, and five-year fixed-rate remortgage products, as well as reductions of up to 0.24% on product transfer and further advance mortgages. Additionally, Halifax lowered rates by up to 0.05% for homemovers and first-time buyers on two, three, and five-year fixed deals.
However, the reductions come amid a sharp rise in SONIA swap rates, which are used to price fixed-rate mortgages. The two-year SONIA swap increased by 13.2 basis points to 4.338%, while the five-year swap rose by 13.6 basis points to 4.313%. This uptick is attributed to renewed tensions in the Middle East, prompting concerns that lenders may soon reverse their rate cuts.
Expert Warnings on Mortgage Rate Volatility
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, warned: “Renewed tensions in the Middle East are sending swaps north again and mortgage rates could soon follow. If they carry on climbing, the rates that are here today could be gone tomorrow.”
Nouran Moustafa, Practice Principal and IFA at Roxton Wealth, described the increase in swap rates as “a real warning light for borrowers.” She advised: “If your deal is ending in the next six months, review your options now, secure something and keep monitoring. A good adviser can switch you if a better rate appears before completion.”
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, agreed, stating: “With renewed instability in the Gulf, recent rate cuts may be short-lived.”
Urgent Advice for Borrowers
Rohit Kohli, Director at Romsey-based The Mortgage Stop, noted that the mortgage market is a “rollercoaster” and some lenders are pulling rates with little notice. He said: “Swap rates have moved up sharply today, and when funding costs rise, lenders that price heavily off swaps often respond quickly. We have already seen other lenders pull products at short notice today, including one with less than two hours’ warning. My advice to borrowers is simple: if the rate works for you today, do not delay.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, urged caution: “Think carefully before playing the waiting game. Any escalation could send rates back up as quickly as they came down. For existing Halifax borrowers, a swift internal product transfer may well be worth more than sitting tight for a remortgage deal that could yet prove elusive.”
Ken James, Director at London-based Contractor Mortgage Services, echoed these sentiments: “The cuts are good news on the surface, but the market underneath is flashing warning lights. While Halifax is cutting, the cost of funding mortgages is rising fast. If swaps stay elevated, these rates won’t stick around. For those who can benefit, the message is clear: act and don’t dilly-dally.”
